John Stagl was tired of begging his bosses to pay attention to business continuity.
He inherited the responsibility of planning for business continuity at an insurance company and decided to get senior management attention by offering them something they thought was valuable.
So Stagl assigned one of his employees a tough task: come up with an economic indicator that predicts whether the company’s insurance premiums would change within a 60 day period. It took five days of tireless effort before Stagl was handed a formula that was 98 per cent accurate.
John Stagl shows the importance of changing customer values.
Stagl had a prediction based on the formula sealed in an envelope and dated. On the day of the next quarter’s premiums being released, he handed the prediction to his vice-president. An opened document predicted a $380 million figure within $120,000.
From then on, Stagl didn’t have to chase his boss for involvement in the business, instead the vice-president was checking in with him regularly.
That experience taught Stagl what it takes to be a business continuity professional today.
It’s far more than creating provisional plans in case of a fire or hurricane. It involves creating constant value for the corporation, says Stagl, who is now corporate consultant with Birmingham, Mich.-based Belfor USA – the largest disaster response company in the world.
That’s the secret to getting senior management support for the business continuity department, Stagl told a packed room at the World Conference on Disaster Management in Toronto recently.
“Getting senior management support is easy,” he says. “Stop seeking it. Stop asking for it. Stop going out and trying to recruit it. Do something proactive – go out and give them something.”
To survive in the 21st century, he said, the business continuity professional supports senior management instead of trying to recruit the latter’s support.
Old moulds of the last century must be broken, Stagl says. Repetitive process used to be the key to profitability, but now it’s just a recipe for a doomed business.
Business continuity has grown beyond the contingency plans of disaster recovery. “That’s the old world,” Stagl says. “Business continuity doesn’t have a trigger factor – it’s continuous.”
That means that business continuity is no longer in the domain of middle management – the everyday paper-pushers in an organization. It’s now fully the responsibility of senior management, who have the job of creating a long- term plan that ensures survival of the business.
The new model is being fuelled by the service-based economy in North America that’s replacing a manufacturing-based economy, Stagl says. Globalization is also a complicating factor.
“Businesses today aren’t putting a widget into the marketplace, but providing a service,” the consultant says. “Customers define service needs, not the provider.”
New businesses are also starting and failing every day, Stagl adds. They’re doing so on an international scale and companies need to be flexible enough to respond to a dynamic marketplace.
That means that older methods of assessing a business continuity plan might not be applicable anymore. The Business Impact Analysis method typically takes longer than three months because of its complex process. But with corporate strategies now changing every 90 days, no one has that sort of time.
“Don’t even undertake it if you can’t get it done in 60 days,” the certified business continuity professional says. “That means you do it simpler.”
The new business continuity model includes looking for new business opportunities, Stagl says. Professionals in the field should learn how to recognize them, monitor them, and react and capitalize on the opportunities.
Stagl experienced, first-hand, the pain of missing an opportunity, when he let a competitor get to it before his company did.
Lost opportunities, he cautions, can cost your business future success and if you string enough of them together, lead to long term failure.
“Lost opportunities cost you as much as any disaster. You can’t quantify it because you didn’t have it.”
But when some competitor profits from the opportunity you missed, “it hurts big time,” he said.
Keeping tabs on your competition is part of the equation. It isn’t something business continuity professionals are used to doing, but it is a simple matter to start making a habit of it. A simple Internet search or conversation with someone in your marketing department will reveal who your competitors are and what new products or services are coming down the pipe.
Define your competition like a potential disaster waiting to happen, and you’ll be able to manage them, Stagl says.
“They’re going to eat your lunch, those competitors,” he says. “Find out who they are and what they’re doing – it’s a simple thing.”
Stagl cites General Motors (GM) as an example of a company where business continuity planning was lacking. In 1987, GM was a giant in the car market, with a 55 per cent share of all cars on the road.
But today the company is rumoured to be close to bankruptcy and is closing truck plants across North America as demand plummets.
“They’re not a crummy company, but they’re not paying attention to what their competitors are doing and what customers are demanding,” he says. As a result, more people are driving compact, fuel-efficient cars from overseas and leaving GM out in the cold.